Commercial feasibility is an element of the study focused on the probability of commercial success. It’s mainly focused on studying the new business or a new product or service and whether your organisation can create enough profit with it. The questions that require answering as part of the commercial feasibility study include: • What are the strengths and weaknesses of your business? • What are the potential sale volumes of the product or service? • What is the pricing structure you’ll use? • What are the sensitivity points for your business in terms of sales? • What is the ROI? Furthermore, if you are conducting feasibility study as part of launching a business, you also need to answer the following questions: • How long can your business survive without a sale? • How long before you break even with the product or service? • How much money is required to start operating? • Will your …show more content…
“When can your business be able to support you and itself without extra financing?” is an important part of a feasibility study. Self-sufficiency is crucial for business success, as having to borrow can hinder the long-term survivability of your business. #5: Feasibility of purchasing an existing business The final essential element of a feasibility study is not necessarily relevant to every business. Nonetheless, it is an important aspect to keep in mind, as it deals with the impact of acquiring a new business. This is not only relevant to new businesses, as your organisation might acquire a new business as part of its growth strategy. The purpose of this final element is to study whether purchasing an existing business is a sound investment for your business. It requires your organisation to answer questions such as: • Why is the current owner selling the business? • What is the business’ performance? If it’s poor, what are the reasons behind
Senior Management of PepsiCo is evaluating the potential acquisition of two companies – Carts of Colorado and California Pizza Kitchen – in order to expand the company’s restaurant business. If indeed PepsiCo decides to pursue the acquisition of one or both, they must decide how to align each of these business units in its historically decentralized management approach and how to forge relationships between the acquired business units and existing business units. In their evaluation, Senior Management is faced with the question of whether the necessary capital investment in order to purchase one or both of the businesses can be profitable for each of the acquired business units, but must also take into consideration that the additional business units will not hinder the profitability of the existing business units.
The second paragraph will be talking about the operational feasibility. That is defined as Availability of things needed for application of the project. Ex: Trained Staff, Budget, Required Technology, Facilities. Here the organization did not keep any effort to make her staff a professional trained staff to be able to help and aware others. Also to respond to any question from parents and children to help them as much they can. The organization used some schools to be
There is a range of criteria relevant for a decision of financing a new venture. To construct my list for the evaluation of a new company as an opportunity I have selected to refer to t...
By using this structured analysis, firms can more easily evaluate the attractiveness of an industry and gain a complete overview of all relevant competitive factors that have to be considered in the process of establishment. It helps to better understand the present market structure and to evaluate as a consequence of that external threats and opportunities. Unfortunately, the analysis established by Porter is not a guarantee for success and above that, it is often accused for limitations, lack of considerations and inoperative outcomes. The non-observance of a collaborative economic behaviour and of governmental influence, the inflexibility of the model and furthermore lack of application to rapidly changing market conditions are major limitations that have to be considered.
These issues could have been resolved if a proper market analysis was done. The outcome of this research could have suggested that it best suits highly populated areas. The objective of this research is to help a company or an entrepreneur understand the business environment better as well as customers’ needs and, therefore, make better business decisions. Once the market research data is compiled, it is then evaluated upon which recommendations and conclusions are drawn.
3. Analyze BP using the five forces of competition model to determine the industries current attractiveness in terms of profits potential
Q1. Using the Mabati Rolling Mills Case Study, explain the various sources of funds as discussed by the management of Mabati Rolling Mills. Give the advantage and disadvantage of each source.
Smitty’s Lil Hauler is a business that deals both in toys and in furniture. The business has been in operation since 1986. The seller John has decided to sell the business because of health issues while Jeff, the prospective purchaser aims to purchase the business as an investment. Since the two investors are driven by different factors, it is appropriate to choose an approach that would be beneficial at the end of the day. For conclusion; it can be suggested that Jeff Malott while deciding over purchasing the business of Smitty's Lil Haulers must answer the important questions like does buying a business make more sense than starting one’s own business. For making the most appropriate decision; Jeff Malott must focus on his financial resources and make an appropriate decision to start up his own business successfully.
All the available alternatives having various (favorable and unfavorable) consequences should be analyzed and then it should be compared with one another, or against the desired objective like sales, volume, revenue etc. The alternatives with favorable and unfavorable consequences should be analyzed before it is compared against one another.
The feasibility study of a business’s design comprises of all strengths and weaknesses analyses within a particular business in order to determine whether the design is practicable and potential to benefit that business in a foreseeable future (Trimi, Berbegal-Mirabent 2012). To access this study, the researcher need to have a comprehensive understanding of the business’s resources and their interconnections which are included in the business model Canvas (Stephen, Richard 2014). This model is considered the most effective methodology in the process of supporting innovation and making decisions, thus, to assure the successfulness of a business or a project (Hanshaw 2015). This essay will discuss some central characteristics including customer
10 Level of investment compared with operators (facilities, databases, technology, advertising, R&D and people developments) 8 8
Teece, D. J. (2010) «Business Models, Business Strategy and Innovation», Long Range Planning vol. 43 issue 2-3, pp. 172-194.
As we start our business, and even our business moves along, we will constantly need to concern ourselves with financing our business. Financing concerns begin with the start-up costs and then continue with business expansion and new product development. When we look for outside financing, one of the first things the investor will want to see is our business plan. Private investor, banks or any other lending institution will want to see how our plan on running our business, what our expense and revenue projections are whether or not our plans for the future are attainable with the business we have created. All of this can be answered by a well-written and thorough business plan.
...not just the financial issues for example equity shares, turnover and profitability. Before any growth entrepreneur need to have a plan to ensure that they know the risk and what problems will be appear and the solution to solve the problem. Although a growth plan is times consuming to be preparing but other company would like to look at the plan before doing anything. Also entrepreneurs always need to beware of the company vision is it similar to each other, culture and the communication also will affect the result and should be considered carefully. Those are the main reasons to make company businesses successful or failures in few years. Furthermore, this method cannot predict one thing is the timing, sometimes entrepreneurs miss the right time to growth their company because of the physical problem like earthquake or hurricane occurs which no one can predict it.
The business plan will also be useful in facilitating the adoption of a strategy that will help the business prosper in the modern market. The plan will be a critical tool that will help in the production of a reliable strategy for attaining the goals and objectives. The proposed business plan will be implemented in three years time. Within the first three years, the business i...